57-1-38 - Release of security interest.
57-1-38. Release of security interest.
(1) As used in this section:
(a) "Revolving credit line" means an agreement between the borrower and a securedlender who agrees to loan the borrower money on a continuing basis so long as the outstandingprincipal amount owed by the borrower does not exceed a specified amount.
(b) "Secured lender" means:
(i) a mortgagee on a mortgage;
(ii) a beneficiary on a trust deed;
(iii) a person that holds or retains legal title to real property as security for financing thepurchase of the real property under a real estate sales contract; and
(iv) any other person that holds or retains a security interest in real property to secure therepayment of a secured loan.
(c) (i) "Secured loan" means a loan or extension of credit, the repayment of which issecured by a mortgage, a trust deed, the holding or retention of legal title under a real estate salescontract, or other security interest in real property, whether or not the security interest isperfected.
(ii) A judgment award secured by a judgment lien is not of itself a secured loan. Asubsequent written agreement between a judgment creditor and a judgment debtor concerningpayment of the judgment is a secured loan if it otherwise qualifies under the definition inSubsection (1)(c)(i).
(d) "Security interest" means an interest in real property that secures payment orperformance of an obligation. Security interest includes a lien or encumbrance.
(e) "Servicer" means a person that services and receives loan payments on behalf of asecured lender with respect to a secured loan.
(2) This section may not be interpreted to validate, invalidate, alter, or otherwise affectthe foreclosure of a mortgage, the exercise of a trustee's power of sale, the exercise of a seller'sright of reentry under a real estate sales contract, or the exercise of any other power or remedy ofa secured lender to enforce the repayment of a secured loan.
(3) A secured lender or servicer who fails to release the security interest on a securedloan within 90 days after receipt of the final payment of the loan is liable to another securedlender on the real property or the owner or titleholder of the real property for:
(a) the greater of $1,000 or treble actual damages incurred because of the failure torelease the security interest, including all expenses incurred in completing a quiet title action; and
(b) reasonable attorneys' fees and court costs.
(4) A secured lender or servicer is not liable under Subsection (3) if the secured lender orservicer:
(a) has established a reasonable procedure to release the security interest on a securedloan in a timely manner after the final payment on the loan;
(b) has complied with this procedure in good faith; and
(c) is unable to release the security interest within 90 days after receipt of the finalpayment because of the action or inaction of an agency or other person beyond its direct control.
(5) A secured lender under a revolving credit line shall close the revolving credit line andrelease the security interest if the secured lender receives:
(a) payment in full from a third party involved in a sale or loan transaction affecting thesecurity interest; and
(b) (i) a request from a third party for full payoff of the credit line; or
(ii) a written request to close the credit line.
Amended by Chapter 235, 2006 General Session